All Forum Posts by: Adam Boonzaayer

@Vandetta B.

We will likely occupy a unit in one of the first properties that we purchase, although the issue of the loan requirements for that set up may be a topic for another thread. We have a couple off market leads that will consider land contract, just have to make sure we satisfy dod frank when purchasing LC and owner occupying.

@Roshan K. @Brett Goldsmith

So I was thinking that with the amount of cash I will have, at least for the first couple deals, that a bank would see that as sufficient reserves to issue a couple asset based loans. I do have access to W2 income history through my wife. She has worked as an RN for the last 2 years making 45k and when we bought our primary we were approved for up to 250k off her income alone (thankfully we aren't stupid enough to have spent that much). I have had 2 different jobs, 6 months of schooling, and 6 months of full time rehab within the last 2 years so that is why I think I wouldn't qualify for a loan. As far as my wife's income goes, like I said in the original post she will be taking a part time nursing job, taking over for her aunt at our small town clinic on MWF, and helping out with family and our future investments on her off days. However she will still be making 25+/hr until after our first kid so we probably could use that income to qualify. I just wanted to know what it would look like with ASSET BASED loans, we will not be trying to get a fannie or freddie loan. And like I said we both have credit scores over 750 and excellent repayment history and will have NO debt. 

I realize I may have made it sound like W2 jobs are the worst thing ever, to me that might be true but I have no issue with anyone that holds one and don't think anything less of them. After we relocate I will be filling my time that isn't spent buying/selling/landlording with project managing/partnering with my cousin who wholesales and flips. I'll probably end up swinging a hammer a lot of days too. 

I will be reaching out to local banks/credit unions in the area very soon. I'll keep everyone posted on how things work out.

@Roshan K.

How good were the deals that you bought? I have a spreadsheet that I am analyzing every expense, 8% vacancy, 10% property management, actual tax bill from county, $200-250/year/unit in maintenance, $350/year/unit Capex/reserves, utility actuals from owner, etc..

How did you structure your loans with your lender? I plan to buy at <70% of value, stabilize, and cash out refi with portfolio lender which will give me all my cash back. Hypothetically it could be perpetual if I structure everything correctly.. Obviously stuff happens so I'll have to come up with more cash at some point I'm sure.

I do plan to continue working, I will be property managing flips for my cousin who wholesales/flips/buys and holds. I suppose I should say I'm building cashflow to live off of eventually, but I don't expect to never work again..

@Brett Goldsmith

Thanks for the input. I've be one of those people for the last 5 years who suffers from analysis paralysis, but now I find myself in a once in a lifetime position to start something big with no other commitments to hold me back. It's go big or go broke for me buddy.. That said I have studied for a long time with a focus on owning rentals, I also have family who own rentals to whom I can go for advice. I do appreciate the concern though. As far as reserves go see the above, and additionally after completing a refi I will likely set some of the returned cash into additional reserves per property.

I've also read @Brandon Turner's The Book on Managing Rental Properties, sooooo I'm pretty much an expert! Haha jk..

We have kind of digressed from my original post, but I welcome any further input such as potential roadblocks, setbacks etc

@Brian Garrett what seasoning period can I expect with this method? Ways to shorten the seasoning period if there is one? Thanks

@Storm S. I guess what I'm after is cash flow as well as cash on cash return. I'm not sure how REITs and securities work, but I know if I buy rentals far enough below market value, and and am able to get all of my cash back out then I am getting an infinite return. I just have to look hard enough to find the right deals.

@Bob Floss II at first glace at the notification I thought Bob ROSS replied to my post! "and over here we're going to paint some happy little cash cows...beautiful.." haha but I digress.. Thanks for the input, that is definitely what I'm after. Although it will make less of a difference with residential multis vs commercial.. Like I said above I'd like buy with built in equity to be able to pull all my cash back out. Luckily I have a cousin that wholesales very successfully nearby and he is sending me some deals that didn't work for him but are great for me!

@Tom Blake

So what you're saying is I should just start buying properties at <70% of value and with proper DSCR and I shouldn't have an issue getting my cash out through a refi? Another major criteria for me will be WHEN I can get my cash back, is there an industry standard on the seasoning period before a refi? (the linked article is explains NO seasoning period when you refinance (not cash out) an existing mortgage such as a loan from a LLC that your own. This is obviously very appealing to me but I'm not sure how/if it would work given my altered circumstances)

@Account Closed 

No way, that won't end well for me

@Account Closed

Why don't you tell that to my wife..

My thinking is the sooner we have them the sooner they are out of the house... Also places a real sense of urgency on the need to secure that financial freedom to support a family!

@Storm S.

Maybe after I've bought as many properties as I can handle I will start funneling cash flow into a lower maintenance investment like you mentioned. I'm looking for big cash flow right now to live off of

@Tom Blake I probably should find an RE attorney BEFORE I get started huh? haha..

I'm not sure if you read the post that I linked, but do you think with a co-borrower I would be able to use the LLC-loan to self strategy?

For any Indiana locals: we will be moving up to the South Bend area so any attorney, accountant, lender, PM, wholesaler, etc, recommendations would be much appreciated!

@Calvin Lipscomb Thanks for the input! And good point.. Although after thinking about it some more I guess the major reason I'm looking at the property size that I am is because I plan to self manage (although I do factor 10% into each deal evaluation for PM) and there are pretty much no larger multi deals around my area that I have found.. I also am hands on and visually oriented so for my first deals I would like to be able to keep and eye on them as well as to build systems for future management. After some time of building cash flow and net worth I will start looking outside my market for larger apt deals. 

Any advice on keeping my cash liquid as I acquire these first units?